Now, Gabe Newell himself has told Kotaku that Valve will create its own hardware and software solution that is designed to compete directly with next gen consoles from Sony and Microsoft.

Kotaku interviewed Newell at the Video Game Awards in Culver City, California, over the weekend. Newell said that the consumer response to Big Picture had been better than expected, and that the next step was to get Steam Linux into alpha and ensure that Big Picture works on the platform.

Newell expects that many manufacturers will create PCs for the lounge room, and that Valve's offering will be just one distinct option for consumers.

He also warned that a Steam Box PC might be a far more controlled and less open-source solution than people might expect:

Well, certainly, our hardware will be a very controlled environment. If you want more flexibility, you can always buy a more general purpose PC. For people who want a more turnkey solution — that's what some people are really going to want for their living room.